In the absence of Congressional action, consensus is that frivolous
lawsuits and attorney sanctions will be a hot election issue.
Sue
the Lawyers

"Enough
is enough." That is the new message from corporate America.
After suffering through the deluge of class action attacks against
corporations that sell products ranging from hamburgers to medical
equipment to automobiles, corporate boardrooms are taking the
offensive against the increasing number of vexatious litigants.
In a role reversal, corporations are moving up the pleading cover
sheet to become plaintiffs, rather than defendants, in litigation
related to frivolous lawsuits. And with an added twist, corporations
are suing the lawyers who at one time represented the plaintiffs
who filed suit in the first place.

Last
week, DaimlerChrysler Corporation was joined by North Star Dodge
Sales as plaintiffs in a lawsuit against three Texas lawyers who
purportedly used falsified evidence in a 1998 lawsuit blaming
the automaker and dealership for a crash that killed four children.
In the earlier product liability suit, state District Judge David
Peeples threw out the case and fined the three lawyers almost
$900,000 after learning that the claimed defective steering column
was intact. Shockingly, this information came from a report made
by the plaintiff lawyers' own investigator.

In
dismissing the original product case, Judge Peeples called the
firm's conduct "an egregious example of the worst kind of abuse
of the judicial system." Evidence presented by the automaker
in the new lawsuit accuses the lawyers of conspiring to commit
several forms of fraud, from tampering with evidence to attempted
bribery of witnesses. In addition to filing the lawsuit to discourage
frivolous and fraudulent court claims, the automaker is reported
to be preparing a complaint to the state bar association.

Inasmuch
as a corporation's decision to file a separate lawsuit seeking
punitive damages against the plaintiffs' lawyers may be an emerging
tactic, court rules have long existed providing for sanctions
and punishment against lawyers found guilty of wrongdoing. For
example, Federal Rule 46(b)(1)(B) states that a lawyer who "is
guilty of conduct unbecoming a member of the court's bar" may
be disciplined or disbarred.

Perhaps
the most common form of sanctions imposed against opposing counsel
occurs under Rule 11, a federal rule that enables judges to penalize
lawyers who violate the provisions contained therein. For example,
Rule 11 requires the attorney signing pleadings to certify that
the signer's knowledge, information, and belief were "formed after
reasonable inquiry," that the pleading or motion is "well grounded
in fact and is warranted by existing law or a good faith argument
for the extension, modification or reversal of existing law, and
that it is not interposed for any improper purpose." Thus, under
Rule 11 an attorney is required to engage in additional investigation
before signing the pleading. And Rule 11 sanctions are not the
most potent arrow in corporate defense counsel's quiver. While
those sanctions may deter the filing of claims and result in a
dismissal, they do not represent adjudication on the merits when
granted.

Sanctions
are also appropriately imposed against lawyers under federal law -- title, 28, section 1927 -- for conduct that, viewed objectively,
manifests either intentional or reckless disregard of the attorney's
duties as officers of the court. In such situations, the court
often examines whether plaintiffs' counsel's conduct, when viewed
objectively, imposed unreasonable and unwarranted burdens on the
court and opposing parties, and whether plaintiffs' counsel acted
recklessly or with indifference to the law.

Several
years ago, section 1927 sanctions were entered against a plaintiff's
attorney in a products liability suit against Upjohn Company.
In that case, a three-judge panel of the United States Court of
Appeals for the Seventh Circuit affirmed the decision of the lower
court judge ordering the plaintiff's attorney to pay costs and
legal fees of the defendant because the attorney "multiplied the
litigation unreasonably and vexatiously." With an additional
slap on the attorney's hand, the court noted that "[c]ounsel is
obliged to research the law before filing suits." More recently,
the same panel of the Seventh Circuit removed the attorney from
the roll of attorneys authorized to practice because she failed
to pay the sanctions entered under section 1927.

Earlier
this year, in class action product liability litigation involving
the diet drug "fen-phen," the manufacturer filed a motion for
an injunction and for civil contempt and sanctions against a lawyer
representing one of the plaintiff class members. Described in
the ruling as "a sad day for the court to hold a member of the
bar in civil contempt," the court noted it had no other choice
following the attorney's "patter of evasion and lack of candor
with this court."

In
another products liability action, this one involving Uniroyal
Chemical Company, a trial court sanctioned a party for discovery
violations. Invoking Federal Rule 26(a), the case was dismissed
for failure to provide the required expert witness reports. In
upholding the district court's judgment, the Sixth Circuit Court
of Appeals stated that "any sanction short of dismissal would
permit the repeatedly recalcitrant appellant to benefit from his
tactical obstruction ... [and] in the analogous context of excusable
neglect, appellant has not necessarily forfeited his 'day in court'
solely by reason of his lawyer's misconduct, when [appellant]
has a legal basis to initiate an action for professional malpractice
against his willfully dilatory counsel."

In
addition to some judges reestablishing control of their courtrooms
by punishing lawyers who file lawsuits deemed frivolous, at least
one state attorney general is cracking down on lawyers for filing
lawsuits to extort money from small businesses. This month, California
State Attorney General Bill Lockyer sued a Long Beach attorney
and his law firm for filing what Lockyer referred to as "sham
lawsuits" brought to line the pockets of the lawyer with easy
money. The suit seeks civil penalties of at least $1 million
and the return of money paid by hundreds of nail salon owners
and other small retailers, many of them immigrants, to settle
lawsuits the lawyer brought or threatened to bring. This is the
second case filed by the state attorney general's office against
lawyers accused of abusing a decades-old consumer protection law
that lets plaintiffs file lawsuits even if they haven't been directly
harmed. The first case resulted in three lawyers resigning from
the state bar earlier this month rather than face disbarment over
alleged ethics violations for sending settlement offers shortly
after filing the lawsuits, demanding from $6,000 to $26,000. (To read more about this case, see Three
Down, Many More to Go.) One
settlement offer is reported as reading: "Either pay even more
money to fight in court or settle out of court and get on with
business."

With
class action lawyers under attack by defendants, judges and attorney
generals, some lawyers have jumped on the bandwagon and are chasing
other lawyers. Dubbed as "professional" or "serial" objectors,
some lawyers are making their money by threatening to hold up
class-action settlements by raising objections in what some describe
as extortion-like threats. In some instances, the objector may
actually improve the terms of the settlement. In most instances,
however, the objector uses his status to shake down the class
counsel for a fee to flee and stop clogging up the settlement.
One frequent objector, Attorney Lawrence Schonbrun, summed it
up when he said: "It's the pot calling the kettle black. I can't
listen to class-action lawyers saying objectors are doing it for
the money when they are the epitome of lawyers who do things for
huge sums of money."

Will
these fresh offensive measures stop the marauding band of tort
lawyers who are parading through this country filing frivolous
tort lawsuits? Doubt it. As Chief Justice Warren Burger stated
nearly twenty years ago, "mass neurosis ... leads people to think
courts were created to solve all the problems of society."

Perhaps
the best we can hope for is that some lawyers, at least those
with some scruples, will slow down long enough to recognize that
excessive and frivolous litigation overwhelms the judicial system's
capacity to administer speedy and efficient justice, leads to
higher costs for litigants and society at-large, and even hinders
America's competitive position in the global economy.

Certainly,
public opinion is starting to take note of the horrifyingly out-of-control
nature of worthless lawsuits, the latest of which involve ridiculous
obesity claims. In a recent national survey, 92% of respondents
agreed with the statement: "There are far too many frivolous
lawsuits today."

It
remains to be seen whether public disgust with meritless lawsuits
will motivate legislators on Capitol Hill to address liability
reform. Two bills currently before the House of Representatives
seek to directly prevent or limit frivolous lawsuits. The Personal
Responsibility in Food Consumption Act (H.R. 339) seeks to prevent
frivolous litigation by limiting civil liability of manufacturers,
distributors or sellers of food or non-alcoholic beverage products
in instances where the plaintiff is unable to prove that the product
was not in compliance with applicable statutory and regulatory
requirements. The Medical Malpractice Insurance and Litigation
Reform Act (H.R. 1116) seeks to limit frivolous medical malpractice
lawsuits by requiring that no medical malpractice liability action
may be brought unless it is accompanied by an affidavit of a qualified
specialist that includes the specialist's statement of belief
that there is a reasonable and meritorious cause for the filing
of the action against the defendant. The Senate's companion bill,
the Better Health Act of 2003 (S.B. 1374), introduced last week,
includes a provision requiring a specialist affidavit, too. And
this is just to name a few of the many federal and state legislative
proposals that are designed to clean up the dockets of our run-away
liability system.

In
the absence of Congressional action, consensus is that frivolous
lawsuits and attorney sanctions will be a hot election issue.
President Bush already stated his position on the issue in his
State of the Union speech, "No one has ever been healed by a frivolous
lawsuit." The Democratic candidate, whoever it may be, will likely
espouse a much different perspective, considering the fact that
it has been reported that 74 percent of the $24.4 million contributed
by lawyers and law firms went to Democrats in the last federal
election cycle.

With
presidential candidates drawing their lines and Congress, as well
as some state legislatures -- battling out tort reform in numerous
bills, defendants are left for the time being with the courts
to make their cases against the lawyers. And it does appear that
in the lawsuit tsunami, the tides might be changing.